Economy is far from booming and this is visible both in shoppers’ pockets and in retailers’ financial results. The supermarket industry is the one that has been the most affected by this year’s fuel and wholesales spikes. One of the noteworthy examples is Market Basket’s recent decision to end this year’s special discount, pressured by the market conditions. Saturday is the last day when customers can benefit from the 4 percent markdown offered by the supermarket chain.
The 4 percent markdown that Market Basket customers took advantage of for most of their shopping is nearly at the finish line. The New England store chain started the markdown in January because of increased energy expenses and reductions in the government Supplemental Nutrition Assistance Program.
Representatives of the company declared for The Boston Globe that the discount was not designed to last endlessly but to gradually be eliminated. The markdown period ends today.
A family quarrel over the future of the business prompted an employees’ rebellion and client boycotts in the summer of 2014. The tug of war ended when Arthur T. Demoulas gain the control over the company from Arthur S. Demoulas. The two are cousins. More than 70 company stores are reachable in Main, Massachusetts and New Hampshire.
While some of the shoppers trusted the markdown would go on, others are not that upset as they consider that Market Basket has still some of the lowest prices in the industry. According to Jeffrey Betterini of Epping, N.H, who invested in the company since 1988, the cost-offer is yet to be beaten and he forecasts other future sales periods.
Different clients said they were just appreciative the business is still running considering last summer’s events. For instance, a shopper said he would rather pay some extra money but have the stores still running. Some also said that costumers who complain about the return of regular prices are free to shop someplace else.
Financial conditions have altered since the markdown was introduced last January . Fuel costs have plunged and, all the more essentially, the US Department of Agriculture is anticipating that food wholesale prices will keep going up next year. As a result it would have been nearly impossible to expand the 4% discount in the given market conditions.
The peak in food prices costs has been especially high for meat and dairy items. According to the Department of Agriculture from November 2013 and November 2014 the wholesale price of beef went up by 28.6%, that of poultry by 9.3% and that of dairy products by 8.3%
As per a supermarket industry expert, David Livingston from DJL Research in Milwaukee, the end of the markdown period will not lead to a significant drop in the number of Market Basket shoppers , provided that the chain of stores manages to maintain its prices below those of competitors.
Discounts like that of Market Basket are already regular practices in the supermarket industry, in an attempt to satisfy costumer’s expectations.
Image Source: CBS Boston